US senators vow to rescue the rescue plan
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U.S. stock futures rose, signaling the Standard & Poor's 500 Index may rebound from yesterday's 8.8 percent plunge, after lawmakers said they intend to salvage a $700 billion bank-rescue package.
JPMorgan Chase & Co. jumped 9.2 percent and Citigroup Inc. added 5 percent in European trading as Judd Gregg, the Senate Banking Committee's ranking Republican, and Barack Obama, the Democratic presidential candidate, said a deal would eventually pass. Christopher Dodd, chairman of the banking committee, said senators may deal with the bill tomorrow.
''The U.S. knows the gravity of the situation and a plan will be reached to save their financial institutions,'' said Masahiko Ejiri, who helps manage about $30 billion at Mizuho Asset Management Co. in Tokyo. ''I am relatively comfortable in investing in some of the winners of the U.S. financial turmoil like JPMorgan.''
S&P 500 futures expiring in December jumped 28.8, or 2.6 percent, to 1,147.60 at 9:31 a.m. in London. Dow Jones Industrial Average futures gained 1.8 percent to 10,664. Nasdaq-100 Index futures advanced 1.8 percent to 1,539.25. European stocks rebounded from earlier losses, while Asian shares declined. Government bonds in the U.S. and Europe fell.
The S&P 500 tumbled yesterday by the most since the October 1987 ''Black Monday'' crash and $1.2 trillion in market value was erased from U.S. equities after the House of Representatives voted down a $700 billion rescue plan designed to rid financial institutions of souring loans. Lawmakers and political analysts said the bill will need some cosmetic changes to pick up the 12 votes needed to pass the bill in the House.
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The MSCI World Index of 23 developed markets sank as much as 7 percent yesterday, the most in the measure's 38-year history, as European governments stepped in to save teetering financial institutions and concern deepened that $590 billion of credit losses at banks will drag the global economy into a recession.
''We don't intend to leave here without the job being done,'' said Dodd, a Connecticut Democrat.
JPMorgan, the biggest U.S. bank by deposits, climbed 9.2 percent to $44.76 in Germany. Citigroup rose 5 percent to $18.63.
President George W. Bush will speak at 8:45 a.m. Washington time today about the bailout.
- Patrick Rial and Ian Sayson
